30 Mistakes that Startups Should Avoid

The adage, “an ounce of prevention…” applies to startup teams, especially first-time ones. They can make mistakes that forever weaken or even kill their ability to succeed. Most mistakes made at the formation of the founding team can be corrected, but those affecting voting rights, equity distribution and ownership rights, can become fatal. Two additional groups of mistakes can also be ‘permanent disabilities’ or ‘mortal wounds’: dealing with investors and operating the company. The VLAB and its sponsor, SNR Denton, presented a panel discussion among a venture capitalist (VC), two well-experienced startup entrepreneurs, and an attorney to discuss 30 mistakes and give advice on ways to avoid them.

A list of 30 mistakes that startups should avoid comprised a handout for the audience. The two VCs on the panel concentrated on mistakes to avoid in forming the startup team and in ways of working with investors. The experienced entrepreneur mostly talked about operations. The attorney focused on mistakes in team formation and in working with investors.

A few counter-intuitive points, especially for first-time startup teams, and my succinct advice:

• “Recruit friends and family for the founding team” might be the worst decision for the startup. A startup’s seed funds often come from “FFF”, friends, family and fools. They took the biggest risk and had the most faith in the startup. The emotional relationship aside, the entrepreneur literally owes them. They are already ‘on your side,’ are highly motivated, and you already know them so they are easy to recruit. But they may not be the most knowledgeable and experienced people for your business. The relationship that pre-dates the startup may bias any merit-based compensation model.
• "Money from any source is equally good” is not true. This is where your own attorney who knows the vast and ever-changing array of business terms, and is experienced in negotiating funding terms can save you from being ‘diluted out’ of equity through successive rounds of funding. By the way, one of the mistakes is to take venture money too early and venture funding is the most expensive money that you can accept.
• “Anticipate the market by introducing the most capable, high featured product with the most disruptive technology as possible” can be fatal. It does seem contradictory that VCs greatly value ‘disruptive technology’ yet discount valuation if you still have R&D to do. The sweet spot is to have products or services whose technology is already proven and paid for, preferably by somebody else, and the market has already been primed by somebody else.
• “We will hire a fancy attorney when we get bigger” can mean that attorney-come-lately must repair or ameliorate the damage from mistakes you’ve already made. There is truth in the adage: “An ounce of prevention is worth a pound of cure.”

The free-flowing, 90-minute discussion touched on many useful morsels such as how to connect with VCs and angels. Dave McClure said ‘you must have had 3 previous interactions with me before I will consider talking to you about your startup.’ Most of the advice was to know the mistakes and avoid them and to exercise good business sense.

Did you know you needed or wanted "Pinned Shortcuts"?

I used to think of browsers as lightweight utilities whose sole purpose was to ‘deliver’ me to the Internet. I thought that the tasks that improve the quality of user experience such as ease of navigation, clarity of brand,… were the responsibilities of individual websites. I was both right and wrong.

Browsers have the vaunted position of arbitrating the user interface for all websites. The beta release of Microsoft’s Internet Explorer v9 (IE9) seems to reveal that Microsoft has designed-in ways to co-market websites by making their brands more visible and persistent, enabling the ease of repeat visits and to some extent, the stickiness of user-selected websites. It seems that personalization, customization, the ability to make browsers look and act the way you want are the key competitive factors nowadays. One feature that groups some of these benefits is “Pinned Shortcuts.”

Like a lot of new features, the way Pinned Shortcuts work and the value it delivers are a little hard to grasp. Marketing dogma used to say the goal is to give customers what they need and want. Nowadays, features that correctly predict what customers didn’t know they needed or wanted are on the right path to marketing nirvana: customer delight. ZDnet’s Ed Bott gives an explanation and example of Pinned Shortcuts (as part of a 5-page long discussion of IE9).

“The rest of the browser interface remains intact when you use a pinned shortcut. The Favorites and Settings menus are still in their assigned place. You can also open new tabs in the same windows as the pinned site, a feature that initially had me concerned. The point of promoting specific sites is to help those sites stand out, not just to arbitrarily create extra tab groups. But in practice, I’ve found the design useful, even addictive. It didn’t take long for me to begin creating groups of three or four related tabs for a common activity. For example, I have my blog’s home page pinned to the Taskbar, and I usually open Google Analytics and the WordPress dashboard for the site. Keeping those three tabs in a single group makes it easy for me to click the ZDNet icon on my Taskbar and find one of those tasks, which previously were scattered among dozens of open tabs.”

The browser business is crowded, competitive and moving fast. IE9 is not unique in offering such a feature. Mozilla’s Firefox 3.6 update and Firefox 4 beta have similar and same features by other names. Here is a 2010 table that rates ~50 attributes of 10 browsers that was likely done before the release of Chrome and IE9 beta. 

The extremely vibrant and creative browser extensions sector, that really lets the user customize the experience, deserves its own blog post! Stay tuned.

Flash Mobs x Farmers' Markets

I heard that the First Lady Michelle Obama is encouraging grocery merchants to expand into under-served markets as a way to make 'healthy foods' more available and thereby fight obesity and can provide other societal benefits.

• Lower demand for health services therefore lower costs
• Lower incidences of pre-natal and developmental problems
• Higher productivity (fewer sick days)
• More optimistic outlook (less likelihood of anti-social behavior)

Under-served markets are under served because the profit potential is too low to justify the investment. Technology offers ways to streamline processes that reduce costs which could improve the business model.


Most American middle class residential neighborhoods are near one or more supermarkets that sell fresh foods at reasonable prices. But many inner-city, low-income or 'ethnic ghettos' are not served by large food markets. Those residents must rely on private or public transportation to access supermarkets, or must patronize local 'bodegas,' convenient stores or 'roach coaches,' operators who sell food out of a vehicle. These local enterprises have been 'blamed' for serving high-fat, high-calorie, low nutrition foods that increase the likelihood of becoming obese.

So, how might Short Messaging Systems (SMS), event management SaaS and local mobile advertising (LMA) facilitate the delivery of fresh foods to deprived neighborhoods?

I believe that mobile devices such as cell phones are well penetrated even into under-served neighborhoods. These devices can deliver SMS and local advertising directly to consumers. Consumers can convey to farmers (by using free SaaS for event management, or aggregation or auction) the foods they commit to buy at negotiated prices. Farmers can confirm when and where the foods will be delivered. It reduces risk and wastage. Vendors of complementary products such as bakers or fishermen can join. Once the sellers are on-site, local mobile advertisements can recruit ad hoc consumers. Thus, a combination of flash mobs with farmers' markets.

Such a direct distribution system can foster a local ecosystem of entrepreneurs. For example, if strawberry farmers deliver a load of fresh strawberries, neighborhood entrepreneurs can plan to make and sell smoothies, tarts, pies, jam, juice... I heard a while ago that a cupcake entrepreneur in New York City was using exactly this process to sell home-made cupcakes to workers in high-rise office buildings.

Of course, nothing is so simple. Our society has organized large urban centers to be far from food-producing areas. With major farming conglomerates, it is not cost-effective for farmers to cater to niche markets. Also, we have woven a pervasive and robust regulatory fabric that discourages direct marketing especially of foodstuffs. But every market has the potential to support niches. Perhaps community farms, urban gardens,... motivated entrepreneurs are yet to create good solutions?

Google Voice: Quality of Service, so far

Google Voice started out as a Silicon Valley startup (GrandCentral) whose value proposition was 'one number for all your phone access lines, for life.' News articles say that Google has improved the original GrandCentral service. Good (that's a 'd' on the end, not a 'g'), but not good enough.

A free service deserves a lot of forgiveness because it is FREE, but every product manager knows about market requirements that are check-box items, ones that the target audience thinks are 'givens,' that if not delivered, the whole product or service gets bad-mouthed. One such check-box item for any voice-based product is voice quality.

Ideally, one spends resources to cover the minimum set of check-box items to a 'no objections' level, but really invests in honing the differentiating features to make them better than customers expected. A successful marketing slogan that some vendor has promoted was "delight the customer".

Google Voice's voice quality is not good. There are drop-outs, echos... probably those packets were assigned low priority in the network. That is not good for a voice-based product.

On the positive side of the balance sheet, what differentiating factors does Google Voice have that might compensate for poor voice quality?

• FREE service. That pricing structure is becoming a check-box item. Google has made 'free' an intrinsic part of their brand and have driven most B2C web application to follow.
• Users can choose their own phone number from a set of numbers. Google doesn't make it easy but it's worth the effort.  Most people use a monthly flat fee for national calls so 'local area codes' are less of a differentiating benefit than they used to be.
• Integration with other Google services such as delivery of message notices to your mail box, not only your Gmail mail box. This is a win-win for the user and for Google. It's called cross-marketing where products help each other.
• Voice to text -- The accuracy is not great but the benefit is users can access voicemails with email. If I miss a crucial word or two, I don't have to linearly hear the whole audio message from the beginning to try to catch the words I missed. The added benefit is I have a written version that is editable and shareable.
• An unusual feature is Google Voice announces callers and users must click a key to accept the call.  Not very effective in screening spam calls, but they must consider users with no visual caller ID capability.
• The feature I like best is the ability to put the "Call Me" icon on any web presence where I can add HTML. That feature increases my customer intimacy. My readers can interact with my content by adding text comments or talk to me for free by using Google Voice.

Other features such as making free calls or sending text messages within the US, ringing all specified devices at the same time, creating custom greetings for different incoming callers are nice but not "delightful."

Why Keep Supposedly Landline Phone Service?

I would LOVE to get rid of my landline but I keep the it because

• Back in the Dark Ages, landline calls to 911 allow the operators to locate the physical location of the phone based on the 'the other end of the landline circuit.' I had erroneously believed that the landline will save a few seconds because 911 operators can look up the landline's physical address. This is no longer a good reason to retain a landline because e-911 has been implemented for mobile services as well as for VoIP phones. It might be harder for 911 operators to locate you, but they are able to do so.
• Starting back in the Dark Ages and continuing to today, credit card companies use the landline's caller ID to verify your identity. That use-case is fraught with security problems but it's still more convenient to activate credit cards by calling from the landline than going through the newer authentication hoops constructed by credit card companies.
• Service providers such as phone and cable companies have hidden landline fees into bundles of services such as Triple Play. Their pricing schemes make subscription fees for bundles lower than buying only the services you want, such as omiting the landline.
• Even though landlines aren't circuit switched anymore (no longer a dedicated circuit), they are actually VoIP, people erroneously believe that landlines are still dedicated lines and therefore provide more clear calls with fewer or no dropped packets. This is NOT TRUE. There is legislation in process to prohibit network managers from prioritizing service for marketing reasons -- meaning 'landlines' get higher network priority and therefore better call quality than, say, mobile calls.
• Calls made on the landline are 'sunken,' I've already paid for it whether I use it or not whereas if I use per-call fees for mobile calls, I save a little bit by using the landline instead of the mobile phone. Most people pay for both -- landline as well as monthly cell phone charges -- whether they use either phones at all. Why?

Many people have had the same landline number for years so they keep it for the convenience of their friends and vendors. I think nowadays, with web pages being constantly updated with no notice, people are more used to a continual flux. The deciding factor for whether to keep the same number is entirely based on how easy is its to 'migrate' or export your contacts to your new number.

I recently signed up for Google Voice. It's a step toward enabling anyone to reach me at any time, easily and for FREE. Thanks to VoIP (voice over internet protocol) advanced features, Google will connect anyone with me using any of the devices that I specified such as the landline, or the mobile phone, or both, or some other device, without revealing my phone number!

Try it! Click the image.

Comparison of Video Performance: Microsoft (WMV) , Apple (QT) and Adobe (FLV)

I've had a bad attitude about Flash (Adobe) performance, especially because it doesn't seem to be supported by 64-bit browsers. I've used WMV (Microsoft) as my default video player because I have a windows machine, but I do play games  that use Quicktime (Apple) and Flash (Adobe) so have some experience with all three video players.

This ZD blogpost tests these three players on three machines:

• Thinkpad X200, a newer Windows machine
• MacBook Pro 13, a newer Mac
• Thinkpad T60, an older Windows machine

Here's an excerpt of the results
Average usage rate for Firefox.

Older Thinkpads and MacBooks

Results are fairly close. For newer machines (chart on right), Wave wins by having the lowest percentage CPU usage while Quicktime edges ahead of Wave in remaining battery by 2%. For older machines (chart above), Flash wins in both categories. Quicktime couldn't finish playing the test movie before its battery ran out. 

Adobe has improved Flash a great deal on the Windows platform rendering invalid most of the arguments against it.

The ZD blogpost has good comments on how the various players do or do not support hardware acceleration and the authoring companies' reasons. Might be too geeky for my readers.

Another Giant Leap for Mankind: Synthetic Life Achieved May 20, 2010

J. Craig Venter is not known for charm, but he is undoubtedly one of the most effective scientists of all time, certainly on a par with Isaac Newton, though they both stood on the shoulders of giants. Dr. Venter decoded the human genome; in fact, his own genome. He personally dived the Sargasso Sea to collect hundreds of yet-to-fore unknown organisms and will decode their genomes thereby enriching our knowledge and likely opening new opportunities to enrich our lives.

Do take the time to view Dr. Venter's May 20, 2010, 18:18 minute video explaining the synthetic life project.


So, why haven't the news channels been yammering about it 24/7 like they do for comparatively trivial events? I am unencumbered by any real knowledge so this is pure speculation, but I suggest that the reason for relative disinterest is Dr. Venter has already set up the scaffolding for a commercial venture to exploit this achievement and therefore it is too crass. News people might say that they don't want to be unwitting (or unpaid) advertisers for Dr. Venter. Or maybe the science necessary to explain the project well is too esoteric and the ramifications too mind-boggling for journalists to capture?

I believe that Dr. Venter has already convened a legal entity that has filed patents for his truly innovative processes. I believe that license terms have already been drafted and funding and partnership deals are already underway for joint research, etc. therefore the traditional route for reporting scientific breakthroughs, namely publish in Nature, has already been rejected. So is this a case of a highly structured marketing plan negating the free publicity of a news frenzy?
-----------------------
The Science Channel has already broadcasted two one-hour programs on synthetic life -- one about the project itself and another with bio-ethicist and a priest, hosted by Paula Zahn who did everything she can to sensationalize and sound the alarm about the dangers and threats this discovery may pose.

Feedback from a MicroBiologist
Talked to a microbiologist who I trust today. She said she had read some of the discussion in the science community about Venter's announcement.   They seem to feel that what he and his team did was a proof of concept, putting a puzzle together, not a big step forward. The pro-Venter faction say that people scoffed at the Wright brothers as well.

I can't help thinking that Venter's personality probably did not win him many supporters. Politics pervade all endeavors.

Your Online Reputation

A few weeks ago, I was in a breakfast talk with Zia Yusuf. One of the topics was about online privacy. Zia said that he has given up on trying to maintain any privacy online. I completely understand what he meant, yet I was shocked that he had ‘given up.’ There is a lot of finger pointing about how especially social networks like Linkedin and Facebook betray our privacy, but the information about us that exists online, putting aside things that are uncontrollable by us such as what others say about us or being tagged in a photo or note, is derived from what WE post online about ourselves. So I believe that we are responsible for online content about us. It is up to us to pay attention, be thoughtful, and actively manage our online profiles and reputation.

Most online profile forms ask for a lot of information such as home towns, profession, affiliations such as alma mater, religious practices, volunteer activities, friends and family. People post voluminously about their opinions, products that they use and services that they patronize. Some such information would seem to be harmless. Whether or not I like broccoli won’t seem to have any consequences until the day I bid for a job to market broccoli. Merchandisers are already mining social networks for consumers and advocates ("influencers"). On the other end of the ‘innocuousness’ spectrum is information about our political activities. It is the duty of citizens to be politically engaged, to vote and support candidates, but many decision makers who can significantly affect our lives would penalize those who disagree with their politics. One company offers a tool to monitor employees' activities on social networks! Now, one’s political donations are searchable on the web!

So far, I've only talked about the public web. There is a huge, perhaps even larger body of content on 'private' webs. Most social networks claim that their sites are protected from search spiders, as are many databases such as voter logs, employment databases, criminal records, phone logs... but that information is accessible, ultimately with a court order.

What recourse or remedy do we have, if we’ve already blabbed too much, or the ‘wrong’ stuff about ourselves, online? Some obvious steps are:

• Do a web search for oneself to see what’s out there.
• Revise our online profiles
• Delete material that we no longer want known about us
• Tell our social media contacts not to tag us
• Start posting information that we want known about us. There are few and fuzzy grey lines between ‘being positive’ and shameless self-promotion, or uber-political correctness.

More drastic steps to 'fix' over-exposure can be to end affiliations. There are already services to repair and promote one’s online reputation! One example, and I am not at all endorsing this service, is Reputation Defender. I have only read a few pages of their web site but their service indeed resonates. Building a brand online, and everywhere else, is recommended by everyone, including our Moms. One is indeed known more by reputation than by facts.

Use Domain Names for Business and Personal Purposes

I own domain names mainly to promote my business. I have one domain name that is the 'primary,' as well as several others. These are the reasons why I have several domain names:

• It's worthwhile to own domain names that relate to my business because if someone's search keywords are similar to keywords on my sites, they will still find my primary site. The purpose is to optimize my business web site's search rank, a search engine optimization (SEO) strategy.
• I own domain names that might be used against my business so that competitors cannot buy those names. For example, if my primary web site were "RevGen Group," I also bought the domain names "RevGen_sucks" and "I_hate_RevGen".
• I bought several similar or related domain names such as "RevGen_Consulting" and "Web_Marketing_Strategy" for feeder-sites. These clumsy domain names are useful because they are keyword 'farms.' I put content there that are full of key words and phrases that relate to my business, as well as links to my primary site. In-bound links  improve the web site's SEO. These feeder sites increase traffic and improve my main web site's visibility in search results.
• I redirect all traffic to my business blog to my primary domain name. The benefits of doing this are:
     1. My business blog has an easier to remember URL
     2. A text link on my primary web site to my blog helps visitors get to my blog
     3. I can manage my blog with a blogging applications without having to log into the ISP that hosts my primary web site.

Some families buy domain names for web sites with family news. The global Tseng family has such a web site! (It's in Chinese.) It has news, photos and a forum for members to interact.

Many people are very passionate about certain causes so they buy domain names for a web presence where they promote their causes. A very well-known one is MoveOn.org.

Still others buy domain names from Registrars who are also ISPs because they get a bundled deal where the ISP gives you free email forwarding with your domain name. For example, if I bought the domain "mariatseng" I could have mail addressed to 'maria@mariatseng.com' forwarded to me.

Domain names are very inexpensive and can be very useful.

Digital mobile sensors can save your life, and reduce healthcare costs

This is a very interesting and informative 17-minute video that gives an overview of some of the wireless medical sensing devices that are available to consumers today. The speaker (Eric Topol) gives statistics on chronic diseases (diabetes, heart failure, sleep apnea), and their cost impact in money and quality of life. He cites Wired magazine articles that show the consumer acceptance of continuous monitoring of physiological processes.


Please take the 17 minutes to view this video.

Order your Virtual Personal Assistant around with your voice

There are a lot of services planned for the semantic web (SemWeb), many of which are not about the human interface. The SemWeb is supposed to be optimized for data to interact and for machines to interact, but at some point, it must deliver value to humans or we won't build them.

'Agent' is used to describe an action such as conduct a search, make a reservation, buy tickets... Examples of more complex actions may be to infer your intent and initiate a series of actions now and in the future based on a set of contextual conditions, like a sell order to your stock broker.

Wouldn't it be great to have a digital personal assistant that understands your intent, in the correct context, that will continuously learn who you are, your preferences and decision criteria, and slave away endlessly without taking offense even when you're surly and not politically correct?

Here's a 43:18 minute video in which Tom Gruber of Siri explains a lot, at great length, and gives a great demo. It is worth your time and attention. Siri is an iPhone app launched in mid-2009 and is 'free.' It's not 'real' artificial intelligence, not 'real' natural language... but still quite compelling. Tom will explain.

KEYNOTE: The Game Changer: Siri, a Virtual Personal Assistant from Semantic Universe on Vimeo.

Predictions: Future of the Web in 2020

My summary of a long article at:
http://www.networkworld.com/news/2010/010410-outlook-vision.html?page=1
13-slide slideshow with data on web usage. That page has links to related content and whitepapers
http://www.networkworld.com/slideshows/2010/010410-outlook-vision.html

My comment
Most of the research projects mentioned in the article will fundamentally change the architecture and premise of the TCP/IP protocol. I hope Vint Cerf (now with Google) will improve our understanding of the relative impact of these research projects and the risks and opportunities for commercialization. Or give the Google point of view on which vendors might take which critical roles to bring which of these innovations to market.

Article Summary
These innovations might be implemented on the Internet in 10-15 years. They will be tested now on a virtual networking lab being built by BBN Technologies called GENI for the Global Environment for Network Innovations.

Key Topics with brief opinions by moi

• Virtual networks like GENI
• Content-centric networking where content types are assigned names so end users can choose content types to 'subscribe' to, thereby getting more relevant data and avoiding some spam.
  
• Software defined networking intends to shift intelligence to an external, user-programmable controller, giving users more control. Bad news for router folks.
  
• "Floating Cloud' concept where only the tier value is sent, to manage immense routing tables. The problem with all abstractions is information loss.
  
• "Sometimes On" wireless networks, aka 'opportunistic networks' where one device that does not have access can leverage a peer, connected device to relay messages.
• Davis Social Links intends to substitute the universal addressability of IP addresses with social links to provide a layer of security, like in Facebook where the propagation of a message is authenticated by 'verified friends status.'